1. Donald and Hillary will be retiring in four years and would like to buy...
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1. Donald and Hillary will be retiring in four years and would like to buy a lake house. They estimate that they will need $450,000 at the end of four years to buy this house. They want to make four equal annual payments into an account at the end of each year. If they can earn 8% on their money, compounded annually, over the next four years, how much must they invest at the end of each year for the next four years to have accumulated $450,000 by retirement?
2.You are planning to deposit $12,000 into a bank account at the end of each year for 4 years. The bank account earns 6% compounded annually. After the four years you expect to withdraw $10,000 and transfer the balance to an account that earns 5% interest per year and will remain in the account for 2 years. How much will be in your account at the end of the 6 years? Round to the nearest dollar.
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